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To: Proud_Infidel who wrote (38587)	10/23/2000 10:52:42 AM
From: Proud_Infidel	Read Replies (1) \| Respond to of 70976

Palm seeks new sources as industry faces parts shortage By Bloomberg News October 23, 2000, 4:45 a.m. PT TOKYO--Palm, the world's No. 1 maker of handheld electronic organizers, is increasing suppliers of parts needed to manufacture its Palm VII and other branded products, as it faces an industrywide parts shortage. In short supply are flat-screen panels, flash memory and radio transmitters, Satjiv Chahil, chief marketing officer at Palm, said in an interview. The shortage stems from growing demand for mobile devices, such as electronic organizers, digital cameras and mobile phones, he said. "It's an industry shortfall," said Chahil. "We are now working aggressively to line up more component suppliers than before." Palm is not alone in suffering from a parts shortage. Companies from game console makers, such as Nintendo and Sony, to cellular phone makers, such as Matsushita Electric and Kyocera, have voiced similar concerns, as consumers worldwide demand handy devices for entertainment, communication and other needs. The devices use many of the same components. Demand for Palm and other handheld personal computers is likely to grow further because those who already use these devices "account for less than 2 percent of PC users," according to Chahil. "We've just scratched the surface so far." Worldwide PC shipments rose 18 percent during the third quarter, Morgan Stanley Dean Witter analyst Gillian Munson said last week, citing researcher IDC. IDC will report later Monday that PC shipments totaled 33.3 million units, Munson wrote in a report. Santa Clara, Calif.-based Palm said in September that net profit rose 79 percent in the first quarter to Sept. 1 to $17.3 million and sales more than doubled to $401 million, as the company shipped 1.49 million of its handheld devices. "We expect a healthy or steady growth rate" in Palm's business performance, Chahil said. "The question is, based on accelerated growth, how long does it take for the supply-side industry to realign itself to meet the need of this new space?" To help expand the handheld organizer market, Palm will develop products on its own while working with other companies to increase the presence of devices running on Palm's operating system, Chahil said. Palm has licensed the operating system to Sony, Handspring and others. It's also working with mobile phone handset makers such as Motorola, Nokia and Kyocera. "For one company, you can't serve the whole world by yourself, so we are a very 'partnering-oriented' company," said Chahil. "We hope to announce regularly interesting partnerships that'll expand the market." Chahil was in Japan to attend a meeting of content providers for Palm's wireless Internet service, to start in Japan in the first half of next year. About 500 developers attended the meeting Thursday, twice as many as the company had expected, Chahil said. The service is now available in the United States. Palm shares Friday rose $2.31, or about 4 percent, to $59.38.